We are calling ourselves cautiously optimistic. The optimistic side i think is linked to fundamentals not just in the u. S. But globally the part that does scare me a little bit is the technical side of the ee squags where you do see these extreme low vol levels some extreme decommissioning if vol comes up, debt ceiling, you could see vol spike up the market could see some weakness in the short term medium term i consider to be confident. Gold is out performing stocks on the first time in six years whats the message in that i dont think the message is very much. Portfolio, 3 of gold. You increase it to 5 . The real story is what dubrofko is talking about, in technicals. You have to look at whats going on with the fangs right now. The weakness that is specific to todays take is all about the fangs. I have people asking me, amazon, i own it its down 12 . What am i going todo here . For some people youre going to stay in the name, but for other people on a 12 pull back when youre getting technical breakdowns, have you to Pay Attention to it. The market is on the defensive. John spalazoni sends an email that says the fangs, exactly, making lower highs and lower lows that seems to be an issue that this Leadership Group and everybody felt like was banking on to continue to take this rally higher is waivering. You have it backwards you have it backwards. The most positive sign you can find when the leadership stocks are breaking down but the rest of the market picks up the slack and doesnt fall apart, that is what somebody that understands technicals would be paying attention to facebook is working on its fourth down week in a row. Nobodys panicking amazon, fourth down week in a row. Below the 50 day for the First Time Since last december people are not panicking those stocks are undergoing consolidation and yet the market is acting very well. Take a look at iwm, which is small cap etf, under performed the s p four straight weeks. This week its ahead by almost a full percentage point. That could be an inflection. Crude getting killed today the xle, flat to barely down thats a positive. Biotech looks good semis look fine, not involved in the fang names so i think its very important that we think about what do you say about a market where its leadership is being taken out back and shot and keeps chugging higher i think you say thats healthy you dont say, uhoh, this is about to take the whole shooting match down. The market looks like its spinning its wheels a bit. No 2 of alltime record highs up 13 on the year. Josh, youre talking about the market the s p 500. Hes talking about i think the overall market itself. Listen, if you have been in the fang names, you have to Pay Attention to what is going on right here and the question becomes, yes, youre seeing things like the russell have a little bit of a recovery youre seeing today some strength in the xle. Youre seeing the retail names go into that the questions become do you look at those names and do you say, okay, i want to reallocate out of the fangs into those names because i dont believe in a big s p 500 correction thats the question. Joes right if you told if you told somebody on july 31st the trade for august go long xrt retail, go short amazon, they would have they would have had you committed to a looney bin. Thats the trade this month. Some of its counter trend doesnt mean it will keep going. Doesnt mean you change around your whole portfolio to joes point. I think you Pay Attention to the stuff, but you dont allow it to completely divert the way you were thinking just a few weeks ago. The markets much bigger than fang stocks. Right. Weve been through periods where theyve been some weakness the stocks are still in theyre double the market on year so its natural to give them some love. Youve got some concerns as you pointed out about the debt ceiling, about the Government Shutdown id argue that the government has been shut down going into our ninth year, and it really hadnt mattered, right no, but tell me whats going to be the Leadership Group to take that next leg higher. Well, you see thats the thing. Thats a danger. To me thats like day trading. Thats like betting on mark. Come back to tibetan stocks. I havent sold any of my airlines i dont have as big of a position as ive had im sitting on 50 cash. So im looking at the airlines again. Those are in a bear market those are down 20 its crazy i dont know the reason. I know some of the concerns, but i think its overstated. Let me pose a question this way then right. Can the market take that next leg higher, jim, without the fangs . Yes, it definitely can, but i think the more critical question is when might it do so ive got to tell you, scott, i dont think its going to be in the next week. I athink were in a dull territory. We havent seen a selloff in the highly illliquid weeks. Were really at the tail end of earnings we have retail earnings. Thats not much to sink your teeth into everything were talking about washington, weve been talking about this for six months, seven months now the market 2k0e7b9 have anything to move higher on right now. I think what you need to do is get past labor day you need to see if theres any real traction on this tax reform which still seems in its infancy at best. Whats going to lead higher, im a Value Investor im seeing that rotation happening right now. Its not just really beating down sectors like retail, im seeing a lot of cheap industrials, stocks that sometimes we make fun of a gm or intel. Those stocks have been nicely percolating higher people may be taking money out of stocks they think are a little bit too expensive and saying, where am i going to park my money. Go ahead. Im going to disagree with you, theres nothing to sink your teeth into. Youve got a Global Economy thats being manifested in what were seeing the base metals doing, copper and aluminum theyre moving higher for the first time in years and years and theyve been doing pretty well. Dont you think i know that im sorry to interrupt you my point is ill agree with you on what you just said, its factual. Its been a fact for a month if not more. I want to go to dubrofko. You can go to him in a second let me no, we dont know that, okay . We dont know that because thats why the stocks are doing what theyre doing the Global Growth is a unique phenomenon relative to the last decade or longer yeah, but we havent been talking about it since january. We havent seen the full benefits of it. Do you have a bell you can ring the one that we should use for you. You weretalking about what the leadership. Thats the leadership. Everyone thats paying attention knows its emerging markets. Chinese internet up 30 or 40 . India up 35 has this really become apparent to all investors are we yet to see the real flows coming into the space or like what inning would you say that rally could be in . And is that enough to keep the metals rising, for example so i think the year in trade is highly contingent upon the direction of the u. S. Dollar i do think so. If you are looking at the e. M. Trade throughout the world and the last several years when the dollar was strengthening, there was a massive divergence if you think were seeing some convergence between central bank, the u. S. Perhaps doesnt do too much, dollar could continue to weaken, that likely will continue but i think dollar is instrumental. Do you want to answer the question on whether the market can deal with the high growth tech stocks . Sure. No coincidence tech is down a half a percent and the s p is down a little more than 1. The market i think this year has basically gone through a lot of different rotations and the rotation has basically been through growth and value, growth and value. And i think in order for the value to grow you need a catalyst absent a catalyst, money defaults into growth trade what could that catalyst be . Weve talked about this many, many times potential tax reform or people perhaps adding some high probability there. You will see a lot of your airlines, autos, retail, financials and so forth moving higher. Sorry for the bell sound. I was anticipating josh starting to talk again. Have a siren. I dont think a bell will control him. Any investment, doesnt matter whether its value, growth, em, whatever you want to have a catalyst any time youre initiating your trade. Absolutely. I cant say theres a catalyst in the offing who knows whats going to happen with tax reform. What i will say factually, if you look at Large Cap Value versus large cap growth, during the First Six Months of the year it was a turkey shoot. 13 Percentage Points of out performance. Since then its been flat. Im not saying value is taking over thats not what im saying what i am saying is value is hanging in here and does at least threaten i cant tell you what the catalyst is other than theyre going higher right now i would look at a gm, something that trickles higher huge dividend year, low earnings multiple. I dont think we got an acceptable answer, at least i dont feel i did, as to why gold yes. Is outperforming. Ill tell you why i think the Market Sentiment doubts market is starting to play a little bit you had kelly, right, come in . He took over as chief of staff so there was some hope that hed get the president tamed, right so that didnt happen. Then you had bannon leave and you had what was some people thought was a great speech in phoenix, i thought was more of the same and then guess what, back to the same old tricks. So thats whats driving gold. Thats whats weakening the doll dollar thats whats keeping the treasury where it is its the fear trade. Fear that nobody knows whats going to happen in washington or what they think is going to happen isnt good. Well, the president unleashing a new tweet storm this morning putting senator Mitch Mcconnell and House Speaker paul ryan in his cross hairs. Eamon javers is live at the white house. Eamon . Reporter scott, thats right. Just last night the white house put out a statement just how united President Trump and Mitch Mcconnell were in terms of the republican agenda on capitol hill this morning the president unleashing criticism of Mitch Mcconnell on twitter and adding to that, the speaker of the house, paul ryan he tweeted that i requested that Mitch Mcconnell and paul ryan tie it into the popular v. A. Bill it is not for easy approval. They didnt do it. Now we have a big deal of dems holding them up as usual on debt ceiling approval could have been so easy. The president also tweeting the only problem i have with Mitch Mcconnell after hearing repeal and replace, that should never have happened. Scott, needles to say, those are not the tweets of somebody who feels himself to be united, those are the tweets of somebody who is critical. In Mitch Mcconnells statement yesterday he didnt deny the New York Times reporting from earlier in the week that he said he questions whether or not the president will be able to salvage his presidency at this point and also that there was a profanity laced Conference Call between the two men on august the 9th where the relationship boiled down in which the president was apparently upset about two things, one, the failure of obamacare up on capitol hill and also as the New York Times reported, Mitch Mcconnells failure to shield the president from the russia investigation up on capitol hill today in a tweet the president saying the only thing hes frustrated with mcconnell about is obamacare by implication there saying hes not frustrated with Mitch Mcconnell about the russia investigation as the New York Times reported. Clearly a political rift. Eamon, thanks on the north lawn of the white house. Dubrofko, the Political Risk in the market, is it now at its highest since the election is it the highest or not . Its not a very easy thing to quantify. If were talking about things like debt ceiling, fights, shut downs, more so than taxes, is it a problem . GeoPolitical Risk is elevated, no question about it i do think the market for the most part will continue to work through it so you could see some periods of buying and selling its not going to be a key catalyst. At what point do you see the ceos lose complete confidence . They came back after trump was elected and they said, were going to take the spending off on the Conference Calls. Theyre very optimistic. You havent seen cap x in a long time in the market at what point do the ceos start saying on Conference Calls, we have no confidence in the future how about last week im sorry to jump in front of you, but last week when they all abandoned the president. That doesnt necessarily mean theyre going to change the way they run their own businesses or deploy capital. Ill bet ya ill bet ya from last week when you start hearing earnings calls and Conference Calls now, that its going to be picking up i think that was the bellwether, when they all left last week. Whats your view on that . On the when when washington behavio behavior, specifically trufrms behavior starts impacting ceos. And thus the market. Exactly i think everything has been going on for nine months, 12 months since the election. You could argue one of the reasons why cap x has been structurally lower is because there hasnt been as much unity as we wanted in d. C. Things take a turn for the better, you could expect a form of pickup. If they dont, you continue to see a similar environment that weve been in. But i dont think, again, that the Political Risk is necessarily can present the big shock to the market itself by the way, you dont think if we get into some scenario where the debt ceiling becomes a real issue, Government Shutdown becomes a real likelihood thot markets not going to be upset about that look at, for instance, what is it, 2013. You had a situation where basically the market sold off by 2 1 4, 2 1 2 from october 2nd or 3rd until the 8th in that time period. There was also a period where the government where, sorry, the u. S. Was downgraded by rating agency. Thats 2011 2011. 2011. Way more severe than what youre saying. Probably more to do with europe than just specifically our own. Different global back drop there. Exactly. So i think this time around the part that just scares me a little bit is you will likely see volatility levels pick up. That in itself could cause some degree of leveraging. Thats a buy opportunity for you. I would argue thats a buy opportunity. I just dont. Last quick point. All along the last couple of years weve heard once Monetary Policy goes away we need fiscal policy, so by the nature of what im hearing youre telling me thats going to be completely absent and the handoff for Monetary Policy to fiscal policy not going to be there and a problem . Yes, its a problem for the market the timing is a difficult question at what point does the market say i need some form of fiscal support in order to basically sustain, if you will, this rally. Is it six months, nine months, twelve months . If anything, conditions continue to gradually tighten do we get something on the tax side, infrastructure side . If we do, we can argue for higher up side if we dont, things gradually tighten and the market gradually continues. Are you expecting a correction of greater than 5 lets say . I would say that in the coming weeks you definitely have a number of different catalysts related to, like you were saying, on the political front central bank meetings, that could drive single digit, mid single digit correction in the market but, again, four months out, six months out we do see new highs. Ill give you a reminder as well that the House Speaker, paul ryan, will be on power lunch today. Exclusive interview. Theyll be discussing everything, tax reform im sure the president s tweets and everything else. Lets get to leslie picker with the market flash. Hey, scott. Adp climbing higher over one of the most contentious proxy fights bill ackman wants a fresh start. He wrote a letter, quote, there have been misunderstandings over the past few weeks which unfortunately have clouded what should have been a productive relationship from the start. He added hes looking forward to meeting with management and the board on september 5th to discuss the proposals he detailed in a recent presentation an sec filing revealed that mr. Ackman initially wanted to extend the deadline to avoid the perception that he and the company were, quote, at war. The filing showed he was committed to a proxy fight and would not consider a settlement. The companys annual meeting is not for a few more months. Well see if the two sides can have a meeting of the minds before then. Well keep our eye there. Heres what else is coming up on the Halftime Report. Texas is about to get hit by heart ache this storm is expected to be a hurricane soon some are predicting a record breaking flood well hit the gulf coast and jim cantore. Well talk about refiners, nat gas and more. Chipotle grill, the analyst behind it will make her seca for you to buy this stock at the big dip. The Halftime Report with scott wapner and the traders is back in two minutes track your pack. Set a curfew, or two. Make dinnertime device free. [ music stops ] [ music plays again ] a smarter way to wifi is awesome. Introducing xfinity xfi. Amazing speed, coverage and control. Change the way you wifi. Xfinity. The future of awesome. Welcome back what could be an historic hurricane taking aim at the gulf coast of texas today and a lot of this countrys energy structure. The weather channels jim cantore is in galveston waiting for the storm. Jim . Reporter harvey, a much different animal today than yesterday. Its on its way to becoming a big hurricane. The question is how big. All the talk was about the flooding it still rightly is. We could see one, maybe even two feet of rain in areas from south texas all the way up into louisiana. That is still the number one threat but as this storm continues to sit over very, very warm waters in the gulf of mexico and have little to really weaken it, it could become or challengeour first major hurricane since 2005 that is something were watching of course, when you get to that status or even a hurricane for that matter, there are other components, like the wind, like the storm surge. Thats going to be an issue to throw in to the rainfall now here in galveston were expecting about a foot of rain and you think, well, thats okay youre out there all of it will drain into the water, but if the water comes up and blocks the waterways of getting the water off the island, it floods. That actually happened back in ike. We dont expect a direct hit like we had in ike or the waves and the surge we had but areas like houston, san antonio, lake charles, brownsville, corpus, could see one to two feet more of rain not to mention where that storm comes in, there will be issues with the hurricane itself, like storm surge and wind harveys going to be around for a long time, potentially even into the middle of next week scott, back to you. Wow jim cantore for us down in galveston, texas the storm is moving energy lets bring in Jackie Deangelis and the futures crew good afternoon. Thats exactly right, scott. Were watching our bob prices. Its a measured move you can see crude oil prices are moving the bigger threat with what could happen is what were going to see on the gulf coast with respect to refineries. A little bit less than half of the nations Refining Capacity is down there. Jeff killburg, youve seen this many times before, when the moves happen, if a refinery is shut or several or whatever the case may be depending on how powerful the storm is, the moves and the prices happen very quickly, right it does happen quickly. Were seeing exxon mobil, shell, as well as anadarco evacuate workers. The threat is severe we have not seen a hurricane down here since 2008 we saw Governor Abbott declare 30 counties as a disaster. Theyre getting prepared investigating that this Tropical Storm will keep a bid on gasoline oil is downticking rbob gasoline is big over the weekend. Jim cantore says its going to languish the harvey hurricane will be here for next week. The prediction is it could land in Corpus Christi tomorrow. Some refineries could be shut down for two weeks or more 2 move doesnt seem like a lot in gasoline. How would you trade it the interesting thing about the 2 move. You look at the chart of gas and crude together, gas looks like its busting out to the up side, crude to the down side thats very unusual. Well go where the story is and it seems to be in gas. If it can settle in 154 in the october contract, i think thats the move thats real i think it could have a few bucks on the up side even if its just the next few days while the market is trying to figure out how much damage is done. Thanks, guys. Meantime, today on futures now were joined by the je jens nordvig plus were bringing you a trade idea for rbob gasoline futures. Cnbc. Com back to you. Thank you so much lets trade it youre over weight energy. Why . I like energy, especially other than the fact you must like pain. No, well, look, thinking about energy from a portfolio point of view. I think its a good diversifier. Ill explain. Okay. Valuation definitely looks a lot more attractive than it did earlier this year. Youre looking at a situation where positioning in the energy front is still quite negative. If you look at managed futures, ctas, theyre not there but close to it. When you talk to investors externally, no one is interested in energy. To me that is potentially creating some form of complacency. Lets see how intense it is and does it deplete any of the inventory . I would be take pickically the long position. I mean, tactically positioned but price action is telling you that the selling is just not over yet hopefully monday of this week represents the start of a bottom, but i think for people that are a little bit more shorter term oriented and they really only want to own things that are going up, they dont have that sign yet for investors looking at valuations and dividends, i agree with you probably an opportunity even if you have to wait six months. The tradeoff of this is the refiners and the potential for this hurricane to present significant flooding that takes the refineries down for an extended period of time its not just the removal of workers in a safety situation that causes rbob to spike or heating oil itself you need significant flooding. Theyre suggesting there is significant flooding the refiners have been trading awful this year. Marathon, valero not so bad. This might be an opportunity if youre stuck in the refiners to actually bail yourself out of them. Yeah. Quick, go ahead. Its been like pushing on a string investing in energy i dont see that changing. Theres enough to analyze there that hardly anybody can analyze without having now to figure out how to be a weather man. If it takes that capacity, great. I may take a look at it. Otherwise, i just dont see it theres unending seems supply. Joe mentioned marathon. Great segue for john najerian who joins us doc, good to see you you have unusual options activity in that name. Which way . Exactly, judge. In marathon. Well, mamarathon 52. 50 strike, judge. Im going to give you a trifecta good stuff. Not all of them in the energy space. 52. 50 strike take a look at that. They bought them for 57 cents. It traded big. A big print of 5,000 contracts, half a million share equivalent, bang, right away what joe taranova is talking about. Theyre finley ohio based. Perhaps how strong the hurricane gets they are one of the goto places and they make a little hey because of this. That one i bought the september 52. 50. Probably be in them through labor day. That is obvious harvey play given the shortterm nature yeah. Of the options bet it is i agree with you 100 . But as we heard from the weather folks, this might linger for a little while and or the damage could be for a while so, in other words, i dont think its just over this weekend, it could be well into next week, thats why i say ill most likely be in them until about labor day. Lets say thursday next week, judge. Whats the deal with caesars other than the fact that you enjoy their pool and their restaurants in las vegas, i know indeed, i do. Yeah, thats my preferred spot what i saw here was october 12 calls. So a little bit further out. A month further out than these other two which were september plays. This ones out in october. The 12 calls, i think they were like 35 cents. Really cheap shot on a bet that maybe theysee a pickup in business obviously the tail end of summer is when an awful lot of money flows through vegas, even with the heat a lot of gaming goes on. The hotter it is outside, the more you might be inside, judge. So that one. And then let me switch gears to murk, mrk, big pharmaceutical. This is a september play september 63 calls i bought these as well as this report in. One of our busier days for unusual activity of the whole week given that were going into the holiday i think were likely to see a slow down towards the tail end of next week so im making, again, my bets now, hopefully taking them off next week. I wonder if theres any correlation to the merck buying and the journal story today which i dont know if you saw it or not it was i believe in the market section. A story it seemed on merck. Yeah. Well, its one of petes favorite stocks. I believe pfizer and merck are his two favorite in the pharmaceutical side. I was not in either one. Now im in merck, but it is a shortterm bet for me. Aim he not longterm in this one. Doc, good stuff thanks for doing business with us today we appreciate it. Thank you see you back here shortly lets do our trader blitz now. Smucker is tumbling on an earnings miss. Joe, youve been in the name before. Quite a bit came into the year long this name was rewarded with an earlier lift higher and had to get out of it because the performance has been lousy its incredible its the Coffee Business and pet business that is underperforming when that is what drove the appreciation higher i think were close to a cathartic moment here. You want to look at the name to buy it. Jimmy, what about williamsonoma stocks at 4 . I think instead of looking at the name you have to look at the sector whats the sector . Its anything with mall exposure or malllike exposure. Youre seeing a bounce back of nims including wi8 yams sonoma if you want to take a position in one of these stocks, like an American Eagle which reported earnings, youve got to have an opinion on the back to school selling season youve got to think its good formals. If you do, take a position could be williams sonoma, you have to have an opinion otherwise this is a dead count bounce. Josh, this says Something Different in the teleprompter. Were doing amd, arent we no, hormel. Its in my contract that we discuss dont they make chips not the good kind of chips. Why is hormel down 5 its actually down closer to 16 the last year. This has been an atrocious stock in a sector under pressure generally speaking today, all of the staples are down pretty decently this one looks the worst not great earnings hormel makes a product that no one is interested in in the year 2017 which is salted, chemically processed meats in cans. I dont see that changing in the near future so i dont know why anyone would be long this name or playing for a bounce. Still waiting for what the negative is. What do you mean . Oh, well the positive is its a 2 yield so if you take a little bit more pain maybe that will get to 3 . Teva under perform at credit suis suisse why . Stocks not doing anything. No, being cut from a high of near 60 down to down to its current level. So are generics. Mylan and others generics arent where you want to be. Teva is a sort of fallen angel its what everybody wanted to own. Everybody thought it was so incredibly safe. Thats not what the story is anymore. You have to return and see what scott gottleibs got the second biggest. Youre over weight to space. You think there is more room to go i do. Health care has been a key nonconsensus over weight for us from early on. This has come from the health care quality, health care side pharma has really lagged back. I especially like pharma and biotech. Health care, if i may. Yes. It continues to check two boxes, superior growth and relatively attractive valuation. Its an interesting, i think, substitute for growth play from a tech angle and its an interesting defensive substitute from a staples angle. A huge bet on burritos one analyst reiterating her 70 buy rating the stock is down 27 in two months hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. Your bbut as you get older,ing. It naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Thanks very much were going send it over to sue herera with the latest headlines. Hi, scott heres whats happening at this hour forecasters now think harvey will be a major hurricane when it makes landfall tomorrow bringing with it strong winds and up to 20 inches of rain. Residents along the gulf coast are preparing. Theyre filling up sand bags and moving in generators for what could be a very dangerous weekend. Defense secretary jim mattis looked to reassure ukraine about the United States commitment to its sovereignty. During a visit today mattis met with ukraines president and attended that countrys Independence Day parade. Here at home, attention kmart Shoppers Stores are closing. They plan to shut 28 locations in addition to the 180 previously announced the full list of closings will be posted today. A short 86 yard par 3 proved to be no match for professional golfer eduardo molonari. It back peddled and fell right into the cup for a hole in one and congratulations to him thats the news update for this hour over to Morgan Brennan with whats coming up on power. Coming up at the top of the hour, we have an exclusive interview with House Speaker paul ryan. Well talk taxes, the trump agenda and the debt ceiling and much more. Plus, what happens when a Company Stock is tanking but its still paying a very high dividend we break down when you should worry that the payouts are about to be cut. And were tracking Tropical Storm harvey what it could mean for oil prices, also the local economy that and so much more straight ahead. In the meantime the Halftime Report is back after this i think that shes a very nice girl. You never got the brakes looked at . Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. Mikboth served in the navy. S, i do outrank my husband, not just being in the military, but at home. She thinks shes the boss. She only had me by one grade. We bought our first home together in 2010. His family had used another insurance product but i was like well ive had usaa for a while, why dont we call and check the rates . It was an instant savings and i shouldve changed a long time ago. Theres no point in looking elsewhere really. Were the tenneys and were usaa members for life. Usaa. Get your insurance quote today. Welcome back to halftime. Chipotle shares getting a vote of confidence from piper javaheri theyre calling for a 65 up side in shares Nicole Miller ragan is the analyst behind that call joins us live from new orleans nicole, welcome back thanks for having me. You sure have been a longtime believer in this name. Youve been over weight the name for two years, two and a half best i can tell. Why are you still a believer it comes down to the unit level economic model, which means high volumes theres really nothing to apologize for a 2 million auv today. Albeit it used to be 2. 5 million a couple of years ago, a 2. 0 million auv, theyre still better than most of their direct competitors. Right but, i mean, i guess the point im trying to make is the stock has obviously had a tremendous amount of trouble. Its down almost 40 year to date that would suggest that despite fundamentals, at least in your mind of a business that appears strong to you, investors arent buying it, so to speak why would they change their own views of this stock at this point . Well, its going to change on the comp, but at the end of the day we take dollars to the bank so, again, were sticking to that profit mentality perspective. That being said, we understand the stock dynamic and the comp so what we are calling for is when not if, but when and as the recovery plays out those comps do materialize and theres a lot of earnings power and leverage, then valuation makes more sense and then investors get back in in the meantime, one thing that is very interesting is the potential or current attraction of nongrowth or call it Value Investors to this stock. I have a one of my panelists happens to be a financial adviser, and he has been critical of the stock id like to bring him into the conversation because just yesterday he was pointing out the technicals dont look good on this name at all among other things josh brown, the question is yours. Nicole, i dont i dont root against chipotle, but wouldnt you tell institutional clients who are the consumers of your research that there is no there is no reason this couldnt have a powerful bounce from 200 a share to 300 you could make the case from much higher levels all the way down so, like, why all of a sudden at this level now this is what we want to die on im curious as to your rational. They have execution. The trading in mind with its peer group 27 times forward. Yeah. Im looking at around 13 times even thats more the method that we used as you can imagine, were in the middle of the contraction cycle for the industry in a whole. The winners, losers, the evaluation gap widens. Taking all of that into account, this is a double digit unit growth story with a lot of white space that has a good unit return model you know, if we could, we would all want to franchise and own a piece of this business thankfully they dont do that and its a companyowned model as we get further and further away from the food borne illness that caused the collapse in the margin and in the revenue, we see them basing here and growing from there and in times. They had a flareup last week yeah. The company the brand is becoming synonymous with the food borne illness its becoming a shorthand amongst millennials any time they want to talk about these types of problems at a qsr another chain had an outbreak and someone on a late night show said, oh, they got chipotled the further we get away from this. This is not in the rear view this is in the car with us still. I mean, the perception and the sentiment are clearly an overhang on the stock. Thats also the opportunity. These are isolated incidents and neurovirus lives amongst all of our countertops as well as many public and private chains. They are the poster child for it, it is extremely unfortunate. That is going to take some time. They have to give us some new news theyre doing marketing. Theyre telling their story. Theyre engaging the customer, getting their food back and going to launch new products ultimately that will help to change the perception as well. Nicole, we appreciate your time and willingness to come on and debate this. Well see you again soon Nicole Miller ragan joining us today from piper jaffray. You tried to, weiss, short this name . Yes i did short it again yesterday morning. Got stomped out. I will short it again. I think ascribing a 20 times multiple on ebida to a restaurant company, nevertheless any company is lunacy. I dont know any that have traded there at least for any period of time thats where she has to get to for a target im looking at a pe of 46 times to get there also. That just doesnt happen if it does happen, its not sustainable. Plus, i think shes a little off base we have a value player sitting right here the best thing about this stock that she didnt mention because its not its not a fundamental input is you already have like somewhere between 15 and 20 Short Interest the bearish arguments that myself and steve are making are like very, very well known for the last 400 points down thats actually the most bullish thing you can say is that its too hated. But doesnt make it cheap. Doesnt mean that the news is going to turn around. Im surprised that number is not higher look at 16 times. 70 the only up side is if they decide to make this a battleground stock like Green Mountain coffee roasters. Bill ackman i mean a true buyout. Private equity is not i dont think its going to happen either, josh. The price trajectory reminds me of keurig, gmcr, it was growth stock. It broke and it broke hard and it didnt do anything until it was bought out. It was bought out at a significantly lower multiple where this is even trading. Im not getting long in this stock, im just saying if you want to be bullish, thats the only reason i could do it. Jcpenney stands a better chance of rebirth. Jcpenney should buy them. In store dining. Wheres my bell sound trying to go to break. Alta beat gamestop ought tee desk few other names. Well try to get to the reports as well when we come back. Whoooo. Youre searching for something. Like the perfect deal. On the perfect hotel. So wouldnt it be perfect if. There was a single site. Where you could find the. Right hotel for you at the best price . There is. Because tripadvisor now compares. Prices from over 200 booking. Sites. To save you up to 30 . On the hotel you want. Trust this birds words. Tripadvisor. The latest reviews. The lowest prices. Thats why a cutting edgeworld. University counts on centurylink to keep their global campus connected. And why a Pro Football Team chose us to deliver fiberenabled broadband to more than 65,000 fans. And why a leading car brand counts on us to keep their Dealer Network streamlined and nimble. Businesses count on communication, and communication counts on centurylink. Breaking news, paul ryan just fin eshishing a town hall at boeing focusing on tax reform well have an exclusive interview in a matter of minutes. She joins us live ahead of that. It was a wide ranging interview with boeing employees and dennis mulen berg was also there. They tried to frame the tax reform effort as a jobs bill in order to do that, they said they need to stream line the code by getting rid of deductions to lower the rate for all businesses paul ryan also brought up Regulatory Reform and said this is an underappreciated part of the gop as agenda and regulatin are just as tough as taxes and less predictable when it comes to all of the drama out of d. C. , ryan said hes in close contact with the president but didnt directly address the tweets from this morning that accused him along with Mitch Mcconnell of making a mess out of the debt ceiling its a day by day deal. Im kind of joking first you control your own actions and you lead by example reporter and that was paul ryan speaking there. He said in terms of the debt ceiling there are many options that are on the table, i tried to pin him down when we speak to him later. I know you will and well be looking forward to that important interview. Do not miss paul ryan, it is an exclusive interview and its coming up on power lunch. Its less than 25 minutes away lots to talk about so much policy and the tweets and the conversation that weve been having on our show today about the relationship between the speaker of the house and sena mory adteajitleer and president. Were back after this. music stops bell rings and i am a senior Public Safety my namspecialist for pg e. My job is to help educate our First Responders on how to deal with natural gas and electric emergencies. Everyday when we go to work we want everyone to work safely and come home safely. I live right here in auburn, i absolutely love this community. Once i moved here i didnt want to live anywhere else. I love that people in this community are willing to come together to make a difference for other peoples lives. Together, were building a better california. Shares in red fin soaring today, up 40 from the ipo price of 15 bucks a share. For your heart. Your joints. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Markets close in three hours, that means its time for final trades. Do with the information what you want, amazon down 12. 5 . Not one analyst lowered price target. Cisco is bouncing back from the post earnings down trend. Western digital looks like theyll come out on top with toshiba. Im still there. I still like it. I still think its going to go higher. Josh brown . Alphabet holding support, staying long. Thanks for being here thatdoes it for us power lunch has more on Hurricane Harvey and the interview with paul ryan. Heres whats on the menu, a very busy two hours ahead. Taxes, health care, the threat of a Government Shutdown and trump agenda we have an exclusive interview with House Speaker paul ryan just minutes away. And retail rally, Abercrombie Fitch soaring, dollar tree, and others riding high as well is death by amazon a bit overdone bracing for the bit one, harvey just declared upgraded to hurricane status